Charvat v. Echostar Satellite, LLC

Filing 80

ORDER: Plaintiff Charvats request to reopen discovery is DENIED. Signed by Magistrate Judge Mark R. Abel on 10/31/2014. (sr1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

Philip J. Charvat,

:
Plaintiff

Echostar Satellite, LLC,
Defendant

Civil Action 2:07-cv-01000

:

v.

:

Judge Marbley

:

Magistrate Judge Abel

:

ORDER
This matter is before the Magistrate Judge on plaintiff Phillip J. Charvat’s request
to reopen discovery based on the May 9, 2013 Order of the Federal Communications
Commission (“FCC”). The FCC recognized that “while a seller does not generally
initiate calls made through a third-party telemarketer, it nonetheless may be vicariously
liable under federal common law agency-related principles for violations of either
section 227(b) or 227(c) [of the Telecommunications Act of 1991] committed by
telemarketers that initiate calls to market its products or services.”
Plaintiff argues that discovery should be reopened because this Court’s decision
dismissing the case was based on a narrow interpretation of agency law that required
Echostar Satellite, LLC (“Echostar”) to have actual control over the manner and means
of the telemarketing at issue to be liable for the many calls made to plaintiff by
defendant’s authorized dealers. Plaintiff maintains that the FCC explicitly rejected this
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reasoning. Plaintiff notes that throughout this case, defendant has argued that its
contract with authorized dealers mandates compliance with applicable laws, but the
FCC concluded that the presence of this contract term does not by itself absolve the
seller of vicarious liability. Plaintiff’s position before this Court had been that defendant
was liable for calls made on its behalf. Echostar argued that it was not liable because it
did not “initiate” or physically dial the calls. In its December 15, 2009 Order dismissing
the case, the Court did not adopt either position. Rather, the Court decided the case on
the basis of agency principles.
Plaintiff argues that the discovery exchanged prior to the Court’s decision did
not focus on apparent agency or ratification. Although the Court’s Order referred to
ratification, ratification was not a primary focus of plaintiff’s brief. Plaintiff further
argues that no discovery was produced relating to whether authorized dealers could
bind consumers to a contract or access defendant’s database and systems, both of which
are factors that the FCC recognized as relevant. No discovery was produced as to the
amount of money paid to authorized dealers associated with unlawful telemarketing or
concerning the nature of the relations between defendants and its authorized dealers
beyond its contracts. Plaintiff asserts that if defendant was aware that its authorized
dealers were engaged in unlawful conduct and failed to act responsibility then it could
be liable under theories of ratification, negligent hiring, or negligent retention. If
defendant allowed its authorized dealers to bind it to contracts or allowed dealers to
access its systems, defendant could be liable under theories of agency or apparent
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authority. Plaintiff maintains none of these theories of liability were pursed earlier in
the case and that these potential avenues of recovery were first recognized by the FCC
in its May 2013 Order.
In response to plaintiff’s request to reopen discovery, Echostar contends that
plaintiff already had a fair opportunity to conduct the discovery it now seeks. Echostar
maintains that in the Rule 26(f) report, plaintiff stated his intent to pursue such
discovery, and he previously propounded the same discovery requests, or substantially
similar requests, that encompass the new requests. Echostar also contends that plaintiff
set forth arguments and evidence regarding ratification and apparent authority in
opposing summary judgment and on appeal to the Sixth Circuit, which took place prior
to the FCC ruling upon which plaintiff bases his justification for reopening discovery.
Echostar maintains that discovery should not be reopened because the FCC held that
sellers could be vicariously liable for telemarketers under theories of apparent authority
and ratification, which is what plaintiff previously argued to the Court years before the
FCC decision.
Discussion. In his memorandum in opposition to defendant’s motion for
summary judgment, plaintiff argued that:
(1) retailers that placed the unlawful telemarketing calls to Plaintiff’s
residence had the authority from Echostar to place telemarketing calls on
its behalf, and were permitted to use the Dish Network name to solicit
sales on behalf of Echostar; (2) unsuspecting recipients of these
telemarketing calls, including Plaintiff, reasonably believed that the
retailers have authority to solicit orders on behalf of Echostar, as they do;
and (3) Echostar has ratified its retailers’ acts by retaining the benefits of
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their telemarketing practices while failing to repudiate their actions in
regard to the 30 calls at issue herein and while failing to take any action to
prevent its retailers from violating the telemarketing laws while this case
has been in litigation or again in the future.
Doc. 42 at PageID#1383-84. Plaintiff stated that “Defendant has ratified the unlawful
acts of its retailers, resulting in ultimate liability resting with Echostar.” Id. at PageID#
1388.
Interrogatory No. 1. Plaintiff’s Interrogatory No. 1 states:
Explain in detail your relationship with The Dish Dealers, and include in
your answer a summary of whether the relationship was contractual in
nature, and how business was transacted between You and the Dish
Dealers from January 1, 2000 to the present.
Defendant maintains that this information was previously sought by Plaintiff’s First Set
of Discovery, Interrogatory Nos. 2, 3, and 9, which includes both 9 and the second
misnumbered 9. Because defendants previously submitted the contracts between it and
its dealers, plaintiff had a full and fair opportunity to conduct discovery on this issue
prior to summary judgment.
Interrogatory No. 2. Plaintiff’s Interrogatory No. 2 states:
Explain whether or not The Dish Dealers had Your authority to sell Your
goods and services to consumers, and disclose the exact factual basis for
such authority.
In his response in opposition to the motion for summary judgment, plaintiff stated:
“Echostar’s agents are also authorized to advertise, sell, install and
activate Echostar’s equipment and services in consumers’ homes, so that
the consumers may view Dish Network’s satellite television program.
(Van Ernst Aff. ¶; Echostar Retailer Agreements, Defendant’s Motion,
Exhibits C-G, at page 6, paragraph 3.9, Doc. 33).
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Doc. 42 at PageID# 1363-64. As a result, plaintiff was aware of this issue and had a full
and fair opportunity to conduct the discovery before the parties briefed summary
judgment.
Interrogatories Nos. 3, 4, 5, 18, 19, 20, 21 & 22. These interrogatories state:
Interrogatory No. 3. Explain whether or not The Dish Dealers had Your
authority to sell Your goods and services to consumers via telemarketing,
and disclose the exact factual basis for such authority.
Interrogatory No. 4. Explain whether or not The Dish Dealers had Your
authority to use your trade name when selling your goods or services to
consumers, and disclose the exact factual basis for such authority.
Interrogatory No. 5. Explain whether or not The Dish Dealers had Your
authority to display your trade name or logo on its web-sites, and disclose
the exact factual basis for such authority.
...
Interrogatory No. 19: State whether or not the Dish Dealers were
authorized by you to set programming of the services they sold to
customers.
Interrogatory No. 20: State whether or not the Dish Dealers were
authorized by you to set the prices for the programming services they sold
to customers.
Interrogatory No. 21: State whether or not you required the Dish Dealers
to seek your approval of each customer obtained by them prior to
initiation of programming services.
Interrogatory No. 22: State whether or not the Dish Dealers had access to
your customer databases for use during telemarketing calls with
consumers.
Interrogatory No. 23: State whether or not you performed any level of
credit checks on potential customers presented to you by the Dish Dealers
prior to approval of those customer leads being approved as customers.
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In his response in opposition to the motion for summary judgment, plaintiff stated:
[C]ontrary to Echostar’s claims that it retains no control overs its retailer
sales agents, through its written retailer agreements, Echostar retains
significant control overs its agents’ sales activities. For example, Echostar
determines, in its sole discretion, the type of Dish Network programming
for which the retailer may solicit orders. (Van Ernst Aff. ¶5; Echostar
Retailer Agreements, Defendant’s Motion, Exhibits C-G, at page 8,
paragraph 4.1, Doc. 33). Echostar determines all pricing for its dish
Network programming, in its sole discretion and without any input from
its retailers. (Van Ernst Aff. ¶5; Echostar Retailer Agreements, Defendant’s
Motion, Exhibits C-G, at page 9, paragraph 5, Doc. 33). Echostar also
retains control over all programming orders, prohibits its retailers from
selling any programming, and ensures that all relationships with Dish
Network subscribers are solely and exclusively Echostar’s. (Van Ernst Aff.
¶5; Echostar Retailer Agreements, Defendant’s Motion, Exhibits C-G, at
page 16, paragraphs 7.2-7.4, Doc. 33).
Echostar retains exclusive ownership of all Dish Network’s subscribers’
names and addresses, requiring retailers to maintain such information in
the strictest confidence. (Van Ernst Aff. ¶5; Echostar Retailer Agreements,
Defendant’s Motion, Exhibits C-G, at page 18, paragraphs 9.5, Doc. 33).
Also Echostar reserves the right, in its sole and absolute discretion, to
accept or reject any and all programming orders proffered by its retailers.
(Van Ernst Aff. ¶5; Echostar Retailer Agreements, Defendant’s Motion,
Exhibits C-G, at page 16, paragraph 7.2, Doc. 33). In other words, Echostar
can reject for any reason any new customer generated by a retailer
through its marketing activities.
Echostar has full knowledge of the fact that its retailers advertise
Echostar’s Dish Network equipment and services through a variety of
means, including the use of telemarketing, as Echostar’s retail agreements
allow its agents broad authority to market, promote and solicit orders for
Echostar. (Van Ernst Aff. ¶5; Echostar Retailer Agreements, Defendant’s
Motion, Exhibits C-G, at page 1, Introduction paragraph A, Doc. 33).
Finally, Echostar retains control overs its authorized agents’ marketing
efforts, requiring them to comply with all local, state and federal laws that
pertain to their advertising and marketing efforts. (Van Ernst Aff. ¶5;
Echostar Retailer Agreements, Defendant’s Motion, Exhibits C-G, at page
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17, paragraph 9.1, Doc. 33). In fact, Echostar reserves the right to take
disciplinary action against any non-complying agent, including the
revocation of the agent’s right to market Echostar’s equipment and
services. (Van Ernst Aff. ¶5; Echostar Retailer Agreements, Defendant’s
Motion, Exhibits C-G, at page 19, paragraph 10.4, Doc. 33). Indeed,
Echostar requires that its sales agents indemnify and hold Echostar
harmless for any violations of local, state and federal laws that pertain to
their advertising and marketing efforts. (Van Ernst Aff. ¶5; Echostar
Retailer Agreements, Defendant’s Motion, Exhibits C-G, at page 20,
paragraph 13, Doc. 33).
Thus, there can be no serious dispute but that Echostar has had significant
authority and control over its authorized retailers.
Doc. 42 at PageID# 1364-66. Based on the arguments put forth in his summary
judgment briefing, it is apparent that plaintiff was aware of these issues and had a full
and fair opportunity to conduct the discovery before the parties briefed summary
judgment.
Interrogatory Nos. 6, 7, & 8. These interrogatories are beyond the scope of the
discovery related to ratification permitted by my May 6, 2013 Order. See doc. 77.
Interrogatory No. 6 asks whether or not defendant knew prior to this lawsuit whether
the Dish Dealers were engaging in telemarketing. Interrogatory No. 7 seeks information
concerning defendant’s due diligence efforts to ensure that Dish Dealer’s telemarketing
was compliant with all applicable laws. Interrogatory No. 8 asks whether “Satellite
Sales” was known to Echostar as a trade name used by Marketing Guru. The requests
do not seek new information concerning issues that plaintiff was not aware of, and
plaintiff has not demonstrated that the FCC ruling necessitates the reopening of
discovery with respect to these interrogatories.
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Interrogatory No. 9. Plaintiff’s Interrogatory No. 9 asks for an explanation of how
much Dish Dealers were paid from 2000 through the present. The request does not seek
new information concerning issues that plaintiff was not aware of, and plaintiff has not
shown how these requests are relevant to the FCC ruling.
Interrogatories Nos. 10, 11, 12, 13 & 16. These interrogatories state:
Interrogatory No. 10. Identify each person employed by You with
knowledge of any telemarketing complaints made to You by anyone in
regards to the Dish Dealers, Your investigation into such complaints, and
the results of such complaints.
Interrogatory No. 11. Identify all persons with knowledge of any sanction,
punishment, or discipline imposed by You upon any of the Dish Dealers
relating to telemarketing.
Interrogatory No. 12. Describe the manner in which telemarketing
complaints submitted or forwarded to You, directly or indirectly, were
handled, investigated and resolved, and identify the individuals
employed by or affiliated with You with knowledge of such complaints.
Interrogatory No. 13. Identify each consumer complaint or litigation that
You are aware of relating to allegations of unlawful telemarketing
conducted by the Dish Dealers.
Interrogatory No. 16. Identify by caption any litigation filed by anyone
against You and/or The Dish Dealers relating to allegations of illegal
telemarketing.
Interrogatories Nos. 5, 6, and 8 and Request from Production No. 5 from Plaintiff’s First
Set of Discovery demonstrate that plaintiff had a full and fair opportunity to conduct
this discovery prior to the summary judgment briefing. Additionally, the requests do
not seek new information concerning issues that plaintiff was not aware of, and
plaintiff has not shown how the FCC ruling impacts the need for these interrogatories.
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Interrogatory No. 14. Plaintiff’s Interrogatory No. 14 asks defendant to identify
any documents that evidence Mr. Charvat’s consent to receive telemarketing conducted
by the Dish Dealers. Plaintiff had a full and fair opportunity to seek this information
prior to summary judgment briefing.
Interrogatory No. 15. Plaintiff’s Interrogatory No. 15 asks defendant to list and
describe any awards certificates, honors, incentives or similar recognition given by
defendant to the Dish Dealers and state the date and basis for each recognition. In his
response in opposition to the motion for summary judgment, plaintiff stated that
Echostar paid its authorized agents for each new subscriber they generated through
their sales activities and offered its agents various monthly case incentives for their
sales of specified products and services. Doc. 42 at PageID# 1364. Plaintiff had a full and
fair opportunity to seek this information prior to summary judgment briefing.
Interrogatories 24, 25, & 26. These interrogatories state:
Interrogatory No. 24: State whether you or the Dish Dealers received the
revenue paid by the customers obtained by the Dish Dealers who then
used your programming services.
Interrogatory No. 25: State whether or not a Dish Dealer could establish a
consumer contacted through telemarketing as a customer of yours
without your approval or consent given to the Dish Dealer.
Interrogatory No. 26: State whether or not consumers who agreed to
accept the sales offers made by Dish Dealers during telemarketing calls
were assigned a customer number of yours.

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The requests do not seek new information concerning issues that plaintiff was not
aware of, and plaintiff has not demonstrated that the FCC ruling necessitates the
reopening of discovery with respect to these interrogatories.
Requests for Production. With respect to the requests for production of
documents, I conclude that plaintiff had a full and fair opportunity to conduct the
discovery prior to the summary judgment briefing. The requests do not seek new
information concerning issues that plaintiff was not aware of.
For the reasons stated above, plaintiff Charvat’s request to reopen discovery is
DENIED.
Under the provisions of 28 U.S.C. §636(b)(1)(A), Rule 72(a), Fed. R. Civ. P., and
Eastern Division Order No. 91-3, pt. F, 5, either party may, within fourteen (14) days
after this Order is filed, file and serve on the opposing party a motion for
reconsideration by the District Judge. The motion must specifically designate the
Order, or part thereof, in question and the basis for any objection thereto. The District
Judge, upon consideration of the motion, shall set aside any part of this Order found to
be clearly erroneous or contrary to law.

s/Mark R. Abel
United States Magistrate Judge

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